West Orange Tax Prep Business Owner Sentenced For Fake Returns

WEST ORANGE, NJ — The owner of a West Orange-based tax preparation business was recently sentenced to one year and one day in prison for preparing false tax returns, federal authorities announced Monday.

Michael Ewell Sr., a resident of Milford, Pennsylvania, previously pleaded guilty to one count of willfully subscribing to a false tax return, and one count of aiding or assisting in the preparation of a false income tax return, according to the Internal Revenue Service (IRS) field office in Newark.

In addition to prison, Ewell was ordered to serve one year of supervised release and pay restitution in the amount of $736,581 to the Internal Revenue Service.

Ewell is also barred from preparing tax returns for anyone other than himself, the IRS noted.

Here are the allegations against Ewell, according to the IRS:

“Ewell was self-employed as the owner of Ewell Tax Center which he operated in West Orange. Ewell prepared fraudulent tax returns for his clients by claiming false itemized deductions on Schedule A, false business expenses on Schedule C, false education credits on Form 8863, and other false credits to obtain refunds for his clients in amounts greater than those to which they were entitled. For example, for one client, Ewell admitted he prepared and filed a fraudulent 2020 income tax return by falsely claiming the client made charitable contributions and had expenses he knew were not legitimate. From 2015 through 2022, Ewell prepared at least 157 income tax returns on behalf of his clients that were false and fraudulent, causing approximately $824,835 in refunds to be issued to which his clients were not entitled.”

IRS officials continued:

“Ewell also knowingly underreported Ewell Tax Center’s gross receipts and claimed false business expenses on Schedule C on his personal income tax returns. For example, Ewell admitted that on his 2020 personal income tax return he falsely understated Ewell Tax Center’s gross receipts by approximately $81,116 and falsely claimed approximately $6,338 in business expenses. From 2017 through 2020, Ewell’s underreporting of Ewell Tax Center’s gross receipts and false business deductions resulted in approximately $118,393 of tax loss.”

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